The £10 an hour that Labour is proposing in 2020 will cripple businesses already struggling with successive hikes in the National Living Wage, the Apprenticeship Levy and a business rates scheme that is both confused and expensive.
Whilst of course we agree that workers should be paid a living wage, there seems to have been little consultation with business owners and recruitment professionals on Labour’s proposed plan, and is another stress for businesses on top of the uncertainty that the Brexit negotiations are bringing.
Jeremy Corbyn and Labour should take into account that employers have additional costs to pay for staff, such as employers’ National Insurance Contributions, pensions, sick and maternity pay and holiday cover. All of these combined with a relatively small rise in in the National Living Wage can create cash flow problems for companies running on tight margins.
What we are calling for is political parties to find ways – such as reforming the failing business rates system – to help businesses with these extra costs, while at the same time letting responsible businesses reward their staff with the National Living Wage.